Travis Kalanick and the Last Gasp of Tech's Alpha CEO

Share

Travis Kalanick and the Last Gasp of Tech's Alpha CEO

Update:On June 14, 2017, WIRED wrote about Uber CEO Travis Kalanick's announcement that he would be taking a leave of absence from the company. Less than a week later, he resigned.

When Hollywood inevitably makes a biopic about Travis Kalanick, the embattled CEO of Uber—the most valuable private company in the world—screenwriters will have a hard time toning down reality to make it sound halfway believable. In the past few months alone, details have emerged about stolen trade secrets from Google regarding self-driving cars, sneaky tracking techniques for evading authorities, and, most alarmingly, allegations of ignored sexual harassment complaints and the most noxious office environment west of Wall Street. There were even reports that a top executive obtained the medical report of a woman who was raped by an Uber driver—and that CEO Travis Kalanick viewed the document. It all culminated in the company tapping former US attorney general Eric Holder to conduct an independent investigation into Uber’s policies and culture.

On Tuesday morning, during a highly anticipated all-hands meeting at Uber’s headquarters in San Francisco, the board of directors shared the results of Holder’s investigation: a 13-page document filled with recommendations for how to fix Uber’s culture, including ceding some of Kalanick’s power to a chief operating officer, who has yet to be hired, one of more than a dozen executive roles that are now empty. Moments before the meeting, Kalanick announced that he would take an indefinite leave of absence to grieve for his mother, who died tragically last week. But the hiatus would also serve as a moment to transform himself into a more worthy leader.

“The ultimate responsibility, for where we’ve gotten and how we’ve gotten here rests on my shoulders.... But if we are going to work on Uber 2.0, I also need to work on Travis 2.0 to become the leader that this company needs and that you deserve,” he wrote in an email to Uber’s 14,000 employees.

Kalanick’s reckoning seems to have been a long time coming. (And the sense of righteousness that has greeted his fall might as well be a subgenre: Uber-freude.)

But while it’s tempting to see Uber’s plan for reform as a repudiation of Kalanick’s aggressive tactics, before now the $70 billion company never distanced itself from his methods. Consider this: During Tuesday’s all-hands meeting, Uber board member David Bonderman made a sexist joke—about how more female board members means more talking—and within hours middling internet uproar forced him to resign. Juxtapose that with the years of scandals Kalanick has weathered, which until now have not come close to touching his throne. Super-voting rights have kept Kalanick safe within Uber. But his ruthlessness was also occasionally celebrated and often overlooked, by his peers and by aspirants in Silicon Valley.

"Uber’s narrative was super compelling,” says CBInsights CEO Anand Sanwal, whose company specializes in tech industry analytics. “Brash founder takes on entrenched slow-moving industry, changes the game, and creates a massively valuable service that folks like.” Sanwal argues that Uber’s success is about execution as much as idea, but the chutzpah with which it operates offers a vicarious thrill too. “Uber was hiring outstanding people, raising obscene amounts of money at eye-popping valuations, expanding its ride-hailing service everywhere while also entering new avant-garde areas like driverless vehicles or flying cars. And it was doing it while also raising a middle finger at regulatory bodies and competitors.”

Even Kalanick’s employees were permissive of the CEO’s behaviors and tactics. “When I joined, I obviously knew of the shady practices going on,” a former female employee tells WIRED. “I was OK with it because I thought that's what being competitive meant. I dismissed [unscrupulous behavior by a top executive] as a one off and told myself that by just working there, I could change things. I kept telling myself that the shady things were how all companies are behind the scenes.”

But everyone has limits. “Then the Susan Fowler thing happened,” the female employee says, “and all that complacency came crashing down.”

Hashtag Winning

Uber came to power during a period of unprecedented public scrutiny of the tech industry, fueled by anxiety toward its growing power and wealth. But Kalanick never conceded to the cultural moment. Instead, in an economic boom that often masqueraded as a democratic movement, Uber embodied Silicon Valley’s capitalist id—unrepentant about winning at all costs.

Seemingly as a result, Uber’s imprint on the world became undeniable. Every company was vying to be “the Uber” of its industry, and consequently its success threw founder worship into overdrive. Kalanick’s previous two startups had afforded him little clout, but Uber’s rise allowed the 40-year-old executive to carve out a privileged spot in the startup pantheon. All of this came about despite his bro-y tendencies. In a 2014 interview with GQ, Kalanick said he was betting customers would be willing to accept certain safety risks if it meant getting a ride in a hurry. “That’s hashtag winning,” Kalanick said. While the betas around him were preoccupied with the optics of every tweet, Uber’s chief seemed to relish his reputation as an unflinching alpha. (Of course, Kalanick has engaged in his fair share of that, too.)

Chris Messina, Uber’s former developer experience lead, says that Kalanick needs to be judged in the context of the transportation industry. "The environment that Uber plays in has many more vested interests who operate by a different set of rules” compared to previous Silicon Valley success stories, Messina says. “So then, is it appropriate to use the same rubrics to evaluate Travis and the culture he’s created? Are we really comparing apples to apples?”

This company narrative matched Kalanick’s personality. Kalanick came across as a macho realist who trafficked in both “bits and atoms,” the term describing when a startup messes with the real world and not just software.

Kalanick may have been out of step with demands on tech leaders to evolve, but his business model captured the lazy consumer zeitgeist. For years, Kalanick bet big that the seductiveness of Uber’s convenience would trump concerns about the company’s methods. And for years, he was admired for those instincts. In 2014, he was nominated for a Crunchie (the Oscars of tech ... don’t ask) for CEO of the Year; he was nominated again the next year. By 2015, Uber was valued at $63 billion and Kalanick was runner-up for Time magazine’s person of the year.

All the while, however, Kalanick was either initiating or excusing unscrupulous actions that, in retrospect, look like warning signs for the more egregious scandals that broke this year. Before Uber got caught using its “Greyball” technique to identify and evade authorities by tracking data from each individual’s Uber app, the company got caught using its “God View” tool, which shows the location of customers who order rides, to track a reporter without her permission.

Last week, Recode reported that an Uber executive obtained confidential medical records of a woman who was raped by an Uber driver in India. The records were shown to both Kalanick and his right-hand man, chief business officer Emil Michael, both of whom questioned whether her story was true or whether it was an attempt to sabotage from Uber’s Indian competitor, Ola Cabs.

Many of those earlier transgressions were colored by misogyny. In addition to tracking a female reporter and questioning sexual assault allegations, in 2014 Michael inadvertently revealed a half-baked plan to smear female journalists like Pando’s Sarah Lacy who had been critical of Uber.

But it was a blog post published three years later by former engineer Susan Fowler that sealed Kalanick’s fate. Fowler’s disturbing account of her time at Uber begins with sexual harassment from one manager and ended with another manager's attempted retaliation for reporting gender discrimination. In between, Fowler exposed how the trickle-down effect of that tough culture led to backstabbing, lying HR reps, and protection for "high performers" even as they racked up offense after offense against other employees.

Uber board member Arianna Huffington, who was tasked with helping Holder’s investigation, had a rather generous reaction to Fowler’s revelations, promising employees that Uber would stop hiring “brilliant jerks.”

The Trump Effect

Uber’s nosedive began a few days after President Trump’s inauguration. It was a particularly dangerous national moment for a company like Uber, which already symbolized many of the economic rifts that defined the presidential election—job loss from automation, inability to make a decent wage in the gig economy, consolidation of power in the hands of a few, the income gap between Uber drivers and Uber riders.

A social media misunderstanding made it appear as though Uber was trying to undermine a taxi driver strike opposing Trump’s immigration ban while Kalanick was on the president’s economic council. The ensuing #DeleteUber campaign that erupted in late January prompted 200,000 people to delete the app, according to TheNew York Times. Kalanick was compelled to resign from the council, while Elon Musk managed to argue his way out of the backlash.

But the revolt that led Uber to reform was not led by consumers. Nor did it stem from the class action lawsuits or settlements with drivers over misleading promises and inadequate benefits. The bad press that finally made Uber reform was about its treatment of employees. As with the Muslim ban, Silicon Valley companies began to address the issues only once the morale of their workforce was in jeopardy.

Related Stories

Fowler’s post is mentioned in the first line of Holder’s recommendations; Uber’s board voted to implement all 13 pages of suggestions, including changing “tone at the top” and editing Kalanick’s list of corporate values, eliminating ones that have “been used to justify poor behavior,” like “Always Be Hustlin’.” During the meeting, directors told employees that, going forward, they would not be encouraged to work longer and always be “on.”

Uber’s underlying ethics dilemma, about the human cost of fast growth, has only intensified as its operations alter transportation, privacy, and even civic infrastructure around the world.

Current and former employees, including Fowler herself, are skeptical of Uber’s public promises to reform. Time will tell if the company can ever stop equating “jerks” with “brilliance” while Kalanick still holds the top spot.

Related Video

Transportation

Guess What Uber's Promising Now: Flying Cars

Forget self-driving cars, Uber has a new one for you... flying cars. The company calls it Uber Elevate and within a decade it’ll be a global network of on demand urban electric aircraft that take off and land vertically.